The new year is well and truly underway, the mountains around Davos have turned a snowy white, and the 2024 edition of the World Economic Forum is about to begin. What can investors expect?
As in previous years, somewhere between 2,000 and 3,000 official guests will attend – many from the business community, as well as government and NGO representatives. Innumerable unofficial participants will round out the crowd, flocking to the countless satellite events taking place throughout the week.
Following on from last year’s theme of “cooperation in a fragmented world”, in 2024 participants will be asked to concentrate on “rebuilding trust”, with a focus on four key themes: opportunities to promote security and cooperation in a win-win manner for all stakeholders, growth and jobs, artificial intelligence, and the complex nexus of climate, nature and energy.
For investors, there is much to discuss for those on the ground, and much to pay attention to for those looking in from the outside.
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The business implications of the energy transition
The common thread running through the themes at Davos is their global nature and the need for joint solutions. In a context of increased geopolitical tension, reshoring of supply chains and increased talk of “de-globalisation”, many have questioned the Forum’s ability to retain its relevance. Yet on the flipside, perhaps against this backdrop of instability and “polycrisis”, one might argue that the need for this type of discussion has never been greater.
The conversation around these topics in Davos follows closely on the heels of COP28, which took place just weeks ago in Dubai. Despite widespread scepticism ahead of the event, and notwithstanding geopolitical turmoil, for the first time the outcome of the conference recognised the need to transition away from fossil fuels. While much of the challenge will be in the implementation, at Davos the discussion is likely to focus more heavily on the business implications of the transition to a clean energy system.
The World Economic Forum has traditionally had a more business-focused membership, and remains a prime opportunity for investors to see the way the winds of large-scale capital flows are blowing
How Davos differs from COP28
Whilst some of the stakeholders present at COP28 resemble those at Davos, the character of the two conferences is markedly different. The COP meetings are closely supported by the work of the Intergovernmental Panel on Climate Change (IPCC) – a scientific body backed by an organisation comprised of government representatives. The World Economic Forum, in contrast, has traditionally had a more business-focused membership, and remains a prime opportunity for investors to see the way the winds of large-scale capital flows are blowing.
Read also: re-NATURE Hub – putting nature at the heart of climate action
From the agenda, that direction is increasingly clear. Environmental and economic agendas have converged, as has been clear for many years from the WEF’s annual Global Risks Report, where intensifying climate conditions, threats to biodiversity and other nature-related risks have steadily climbed the rankings of top risks perceived by 1,200 multi-stakeholder respondents.
Accordingly, the focus on climate, nature and energy ranks highly on the list of topics for attendees to discuss. Here, we believe the strong participation of investors and the business community should be seen as a highly welcome. Based on the estimates of the International Energy Agency (IEA) and other bodies, at least USD 3-5 trillion of investment per year is needed in energy and nature-related transitions during this decade, necessarily involving not only public but also substantial private sources of capital.
…at least USD 3-5 trillion of investment per year is needed in energy and nature-related transitions
